Tuesday, July 28, 2009

Update for 28 Jul 09…

image With the expiry around the corner it has become a fight of sorts – not to let the markets run up or fall – lest the markets end up at levels other than the present one. So it is again leading to a tango – one step forward and one step back. Perhaps if the global cues have not been what they are – the markets would have had been some other state of affairs – but that is not so. The DIIs are bearish and the FIIs seems to be supporting the markets as of now. How long this inflow will keep up might be interesting to see and certainly if they do continue then higher levels are well within the reach.

image The markets of Asia – baring us were good and green. Nikkei up 1.45%, Hang Seng up1.3% and Strait Times up 1.71%. Europe too started off well – dipped and then closed well off their highs – FTSE up 0.21%, DAX up 0.42% and CAC up 0.18%. US was hovering around the flat line only and DOw finally settled at 0.17% green, Nasdaq up just 0.1% and S&P up 0.30%. There was profit taking in US markets but the markets could just about shake off the effects with leadership in banking stocks there.

As far as purely technicals are concerned – the markets are still into their bullish mode. The Candle yesterday was quite close to a Doji with the body of just 3 points. That has the potential to call it a day for the bulls if the markets end lower today. The Bollinger Bands continue to expand and all lower EMAs are above the higher EMAs. The volumes were thin yesterday. ADX continues to be bullish with =DI above –DI but the ADX (14) still at the same place it was yesterday at 19 indicating the trend without too much of strength. MACD is bullish with positive divergence. RSI remains bullish. Slow Stochastic too remain bullish but as of now have spent six odd says in overbought territory.

put call 27 Jul 09 As far as the options data for this month Nifty is concerned the put call ratio stands at 1.6 and that should not permit the nifty to fall this expiry. The Put writers will be badly hurt if the markets were to fall so do expect the markets to end up around these or higher levels. After the results of reliance just see the call build up is still where it was – so I feel that there is more down side to the reliance purely from the put call ratio point of view. So it might not be a good idea toreliance put call 27 jul 09 enter Reliance yet. In any case the results that it has given are yet to be discounted to my mind.

All in all the markets remain bullish – Global cues are likely to act neutral, we are still technically not being indicated a  reversal to bearish undertones except for Doji and overbought Stochastics. ADX as shown in the charts should be taken with a pinch of salt. The option data in Nifty should ensure expiry around these levels or higher and not lower. Ideal strategy for positional holding is to hold long with absolute stoploss of 4450. For today go long above 4569 and short below 4480. If we break the 4480 level then may see the 4295 levels. Best of luck to everyone.



verma7038 said...


your analysis is nice to follow.
But the market is so volatile, it takes a toll on people like me.

S S Cheema said...

I too am passing through a learning phase and I have realised two things make all the difference. First is that we have to discipline ourself and second is that it is not necessary that we trade everyday. I am now just waiting for an opportunity to strike and I know that it will come. If good opportunities come even two three times a month and we make handsome money - that is much better than trying out our hands every day.
Rest assured - that for whatever I am worth - I will post any worthwhile positions to take when the time comes. I do believe that even if I share my views frankly with a million people - they will get or loose what they deserve and I will get or loose what I deserve.